Entrepreneurship

 Fundamentally there are two types entrepreneurship ;

E’SHIP

SME (Small, Medium Enterprise) IDE (Innovation Driven Enterprise)

(Local Markets)
- Focus on Local Markets
- Servicing for Local Opportunity ( ie , Drycleaner, Restaurant, etc)
- Owner is maintaining the control
- Fundamentally important for the economy for serving the need.
- There is no required more cash flow and innovation
(Global Markets)
- Focus on global markets & Super regional markets
- X potential Growth on Unlimited market
- Required more cash, so maintained by shareholder or team
- There is more risk and need innovation to achieve goal
- Initially they need more capital and for certain time the CF will be negative

Cash Flow Cash Flow

Time Time
 Meaning, Definition, Explanation
 Entrepreneurship has traditionally defined as a process of designing, lunching and running a new
venture . Which typically begins a small business such a start up company, offering a product,
process or services for sale or hire. It is being defined as the capacity and willingness to develop
organize and manage a business venture to make profit.
 In 2000 the definition of entrepreneurship has been expended to explain how and why some
individuals or teams identify opportunities, evaluate them as viable and then they decide to
exploit them where's others do not.
 According to Hisrich et al “ Entrepreneurship is the process of creating something new with
value by devoting the necessary time and effort; assuming the accompanying financial, psychic,
and social risk and uncertainties; and receiving the resulting rewards of monetary and personal
satisfaction.”
Putting these perspective together entrepreneurship can be viewed as,
- Recognizing
- Pursuing opportunity
- Taking risk on responsibility
- Innovating
- Making better ( High Value ) use of resources
- Creating new value that is meaningful to customers
- Doing it all over again and again
According to the Nature and Goal of the entrepreneur, entrepreneurial
venture can be started in three ways.

 Salary Substitute Firms :

Firms that basically provide their owner or owners a similar level to what
they would be able to earn in a conventional job, Like Dry cleaners , Retail
Stores, Accounting firms, hair salons , restaurant etc.
 Lifestyle Firms :
Firms that provide their owner or owners the opportunity to pursue a
particular lifestyle, and make a living at it, Like photographer, tour guides
etc .
 Entrepreneurial firms :
Firms that bring new products and services to the market by creating and
seizing opportunities regardless of the resources they currently control.
They create products and services that are worth taking , Like Google, Face
book, twitter etc
The Entrepreneur “ Personality”
An entrepreneur is the person who starts a new enterprise. He brings and organizes the factor of
production together for the exploitation of opportunities from change.

Here are some common personality traits that entrepreneurs possess:

Personality of
Entrepreneur
Motivator
Organizer
Risk Bearer
Innovator
Proactive
High achievement desire
Desire for Independence
Tolerance of Ambiguity
Seek immidate feedback
The Challenges and Rewards of Entrepreneurial Venture

 Challenges of Entrepreneurship
- Getting sufficient funds to start business
- Being fully responsible for the business
- Economic crisis
- Uncertain Income
- Social risk and Uncertainties
 Rewards of Entrepreneurship :
- Being the boss
- Doing what you enjoy
- Having the opportunity to be creative
- Building an enterprise
Women Entrepreneurship
 Women entrepreneurship may be defined as a women or group of women who
initiate, organize and run a business enterprise.
 In other words, the women entrepreneurship involves imitating, managing and
controlling and enterprise by women.
 Women entrepreneurship is entrepreneurship by women mainly directed towards
economic independence and individual empowerment.
 Women entrepreneurship has become a growing concept in the world economics.
 It offers a significant opportunity to women for self employment as well as
generating employment to others .

Issues to Consider in Fostering Women Entrepreneurship :

The following are the main issue to be considered in fostering women
entrepreneurship :
 Government rules, regulations and policies
 Green Approach of entrepreneurship
 Enhancement of entrepreneurial role of women
 Enhancement of competiveness
 Removal of Barriers
 Women Empowerment through Entrepreneurship
 Women empowerment refers to equipping the women with rights and power so that they can
play a major role in the society.
 Entrepreneurship promotes women empowerment by promoting economic independence, help to
build social relationship, promoting gender equality, enhancing training, educational and
development, improving quality of life, building decision making and critical thinking ability,
boosting women morale and developing leadership ability.
Women Entrepreneurship in Nepal :
Lack of capital, infrastructure, institutional support, skill and knowledge, entrepreneurial culture etc. are some of the
hindrances of entrepreneurship development in Nepal. The condition of women entrepreneurship is rather more
miserable and still is in Infant stage.
Here are some issues of women entrepreneurship in Nepal :
 Waiting for opportunity
 Poor attitude of the society
 Better in small and micro enterprise
 Male dominance society
 Poor family support
 Institutional support
Need of women Empowerment :
 Build strong economics
 Establish more stable society
 Achieve internationally agreed goals for development, sustainability and human rights.
 Improve quality of life for women, men, families and communities.
 Foster networking of women with women entrepreneurs which widens their horizon.
 Tourism Entrepreneurship
Tourism may be defined as the activity, services and industries which deliver a travel
experience. Tourism entrepreneurship refers to the activities design for effective &
profitable for and supply of tourism products.

It includes all shorts of activities involved in creation and operation of legal tourism
enterprise. A legal tourism enterprise excludes all form of illegal activities . Tourism
entrepreneurship comprises ( Transportation, Accommodation, Eating Drinking
Establishment, Retail shop, Entertainment business and other Hospitality Services).
Types of Tourism Entrepreneurship :
1. Travel Agents
2. Tour Operators
3. Transport Operators
4. Lodging & Catering Services Provider
5. Information & Guiding
6. Attractions

Opportunities in Tourism Entrepreneurship In Nepal .

- Opportunities in developing tourism infrastructure ( hotels, restaurant, roads, airports etc.)
- Potential for expanding the market for Meetings, International Conferences and
Events ( MICE).
Opportunities in Tourism Entrepreneurship In Nepal .
 Opportunities in developing tourism infrastructure ( hotels, restaurant, roads, airports etc.)
 Potential for expanding the market for Meetings, International Conferences and Events (
MICE).
 Plans to upgrade the current international airport are underway, which will increase the tourist
traffic significantly.
 The expansion of existing tourism products and introduction of new and innovative products
to attract different types of tourist and extend their average stay.
Problems of Tourism Entrepreneurship.
 Lack of Proper infrastructures
 Lack of conservation of cultural and religious sites
 Lack of tourism centers
 Lack of publicity
 Lack of security
 Political instability and unrest
Factor Affecting Tourism Entrepreneurship.
 Participation of private sector
 Development of tourism infrastructure and facilities
 Promotion of religious tourism
 Focus on adventure tourism
 Security
 Diversification
 Transport and communication facility
 Promotion of environment
Rural Entrepreneurship
Rural entrepreneurship refers to establishing industrial and business units in the rural
areas. Rural entrepreneurs are those who carry out entrepreneurial activities in the
rural areas.
Rural areas are characterized by unemployment and poverty. Rural entrepreneurship
promotes rural industrialization. Hence, rural entrepreneurship may be viewed as a
means of rural development. Rural industrialization is normally based on agriculture.
Types of Rural Entrepreneurship
1. Farm Entrepreneurship : Farm entrepreneurship is related to farming. It involves various
agricultural activities for earning livelihood.
2. Artisan Entrepreneurship: It includes masonary, black-smithy, carpentry, repair of pump sets,
board paintings etc.
3. Merchants and Traders : It includes businessmen dealing with the products mainly needed by
the local population. They may be producing goods themselves or acting as middlemen.
4. Tribal Entrepreneurship : Tribal entrepreneurs belong to those who operate predominately in
tribal villages. Their source of origin is tribal community.
Significance / Importance / Role of Rural Entrepreneurship:
1. Employment generation
2. Income generation
3. Balanced regional development
4. Promotion of culture
5. Reduction of rural urban migration
6. Environment friendly
7. Utilization of idle capital
8. Utilization of local resources
Problems of Rural Entrepreneurship
1. Financial problems
2. Lack of technological know how
3. Lack of awareness
4. Prone to salaried employment
5. Poor infrastructure facilities
6. Low risk bearing capacity
7. Low purchasing power of the people
8. Competetion
E- Entrepreneurship
E- Entrepreneurship is defined as the business technique that used the internet to
achieve vision, mission and objectives. E- Entrepreneur use the World Wide Web (
WWW) to transact virtually with other business and consumers.
It operates in a highly competitive market place where sustainable competitive
advantage is difficult to minimal barriers for the new entrants . Likewise there is
always high possibility of imitation of innovation.
It Includes :
E-procurement : it enables the electronic purchasing of products and services from the
company via digital networks.
E-shop : It allows the electronic sales of product and services by a company using
digital networks.
E-marketplace : It allows electronic trade with products and services via digital
networks. ( Amazon.com Mr.Jeff Bezos , Alibaba.com Mr Jack Ma )
Entrepreneurship and e-entrepreneurship are complementary, and a combination of
the two is vital to organizational success and sustainability in today's dynamic and
changing economy.
 The following are some of the factors which are cornerstone in the development
of e-entrepreneurship.
- Customer focus
- Continuous improvement and measurement to achieve customer satisfaction.
- Acquiring customer and market knowledge.
- Measurement of quality using data and tools
- Result focus
- Management by fact and processes
- Striving for excellence through benchmarking
- Valuing human and intellectual capital
- Empowerment and involvement
- Employee training /education/development
- Opening channels of communication
Concept of Institutional Support to
Entrepreneurship
 Entrepreneurship requires resources and facilities. Resources may be financial and others.
Facility may be taken on the form of marketing, research, and training. Hence Institutional
support is essential for their growth and sustainability.

The institutional may be government, non government, autonomous or non autonomous.

They facilitate entrepreneurship development by providing various resources and facilities.
The institutional support the entrepreneurs in legal, financial and others aspects .

Need of Institutional Support

The following are the reason behind institutional support to entrepreneurship development.
 Easy access to capital
 Development of competency
 Access to infrastructure
 Access to market
 Supply of raw material
 Government policies
 Information support
 Create awarness
Institutions that support the entrepreneurs in Nepal.
 Financial Support Agencies
1. Rural Development Banks
2. Micro Finance Institutions
3. Commercial Banks
4. Micro Enterprise Development Projects & Programs
 Government Agencies
1. Ministry of Industry
2. Department of Industry
3. Department of Cottage and Small Industries
4. Office of the company Register
5. Nepal Bureau of Standard and Metrology
 Specialized and Consultancy Agencies
1. Industrial Promotional Board
2. Special Economic Zones ( SEZ)
3. Industrial Enterprise Development Institute
4. Nepal Tourism Board
5. Investment Board Nepal
6. Trade and Export Promotion Center
7. Nepal Tea and Coffee Development Board
8. National Diary Development Board
9. Export Council of Nepal
Creation-Economic Organization- Risk & Uncertainty.
Entrepreneurs assume business risk in the most uncertain environments. The future is
up to them. They are responsible for their successes and failures, and success is
never permanent. Therefore, Entrepreneurs have to learn to handle the risk and
uncertainty of having to be responsible for their company and employees.
Theory predicts that entrepreneurs have distinct attitudes toward risk and uncertainty,
but empirical evidence is mixed. Entrepreneurs are only found to be unique in their
lower degree of loss aversion , and not in their risk or ambiguity aversion.

Entrepreneurship is associated with risk bearing, uncertainty, gain and losses. The
classic economics and philosophers who laid the foundation of thinking about
entrepreneurship defined the entrepreneur either as a Risk Bearer , and an
uncertainty bearer or who are less incline to avoid losses.
Risk Aversion : It is the concept with a very specific meaning in economics. It is the
willingness of people to sacrifice expected payoffs to circumvent taking risks. In
other words it measures the extent to which the utility of a guaranteed payoff is
higher then the utility derived from a proposition with the same expected reward
obtained with risks. Risk aversion is involved in decision making situation where a
probability can be assigned to each possible outcome of the situation.
 Loss Aversion : It refers to the notion that decision makers prefer to avoid losses
over acquiring gains. Loss aversion implies that loosing 50 will decrease utility or
satisfaction by more than the increase in utility or satisfaction that is associated with
a ( windfall) gain of 50.
 Ambiguity Aversion : It is also known as uncertainty aversion and refers to a
preference for risks with known probabilities over and above risks with unknown
probabilities. Ambiguous events have a greater degree of uncertainty that risky
events because not only is the outcome uncertain, but also the probability of the
realization of that outcome and a consequence, the expected payoff.
 What are the three primary reasons people become entrepreneurs ? Which reason is
given most commonly ? Which reason best describes why you may choose to
become an entrepreneur ?
 Increasingly, entrepreneurship is being practiced in countries throughout the world.
Why do you think this is the case? Do you expect entrepreneurship to continue to
spread throughout the world, or do you think its appeal will subside over time?
 Sanjay has a good job working for the Chaudhary group, but is weary of 2 percent
per year pay raises. Because he had read magazine, articles about young
entrepreneurs becoming extremely wealthy, he decides to start his own firm. Do you
think Sanjay is starting a firm for the right reason? Do you think the money he likely
will earn will disappoint him? Do you think Sanjay’s reason for starting firm will
contribute in a positive manner or a negative manner to the tenacity that is required
to successfully lunch and run an entrepreneurial venture?
 Explain how women entrepreneurship and rural entrepreneurship will contribute to
social and economic development of the country, clarify with suitable example.